Estate Organisation Guide: What your Family Needs to Know

Estate organisation doesn’t have to be so morbid, start applying an alternative narrative to the process and view it as a means for lessening the impact and emotional toll, for when the unthinkable does happen. By having conversations about these things sooner, you’re protecting the people you care about most, and preventing additional stress at an already difficult time.

This article will take you through a series of recommended steps, designed to help you and your family, and ultimately put everyone involved at ease.

Why Organisation Matters

It all starts with an initial conversation, a great way to tackle the subject is by simply organising a date to discuss what you want, and how things should be organised with your partner and dependants. Planning can spare everyone stress, time, legal fees and even potential conflict.

After a death, your executor (the person legally responsible for administering your estate) must locate everything you own and owe. Having all your records in one place can remove the hassle of searching for scattered, unkept documents and in return save months, sometimes years, worth of time. The process of probate is made significantly smoother as all your records have been centralised and clearly documented.

A simple way to track documents, accounts, and possessions is by making a note of all of them either in a spreadsheet or file. Put down any information you think necessary, but recording passwords or other sensitive material is generally advised against. Similarly, never include the aforementioned in your will – upon death, your will becomes public once a grant of probate is issued, making any personal details readily available.

For more information on how to apply for probate please refer to the Gov.Uk website, here.

So what Information Should you Leave?

First and foremostly prioritise preparing your will, and once you have an initial document safe and set up, be sure to frequently update the will in line with your circumstances. Any life changes such as marriages, divorces, births, deaths or relocations should all be accounted for. Your will is a legally binding document, which ensures that what you want to happen with your wealth is honoured and followed.

Think of it this way: no will = no control over your estate upon passing.

In your planning you should be considering all assets, any liabilities, legal documents, passwords and digital access. See below:

Assets * ***	Liabilities (any debts left to be settled) **	Passwords & Digital Access *  *** ****	Legal Documents *
Bank accounts (with institution names)	Mortgages	Email login instructions	Your will
Investment and retirement accounts	Credit cards	Financial account access guidance	Trust documents
Property deeds	Personal loans	Password manager master instructions	Power of attorney documents
Business Interests	Business loans	Cloud storage locations	Healthcare directives or living wills
Vehicles and other valuable personal property (jewellery, art)	Taxes owed	Digital / social media platform access	Any codicils (amendments to your will)
Life insurance policies	Subscription services	Mobile phone security code	Insurance policies

*  For each item note: where it is held, account numbers, contact details, where official documents are stored, and where the original signed copy of your will is stored. Please be advised, it isn’t recommended to ever leave full bank account details, the institution name, account number and contact details will be sufficient. Probate may me necessary in order to close an account.

** Settling debts can prevent overlooked obligations and protect your estate from unnecessary penalties.

*** Never leave passwords loosely written or in unsafe locations. A reliable method is using a secure password manager and documenting how to access it. Many password managers allow for emergency access, for the purpose of estate planning.

**** Preparing and handling your digital assets remains quite a grey area, and can be complicated. It’s recommended that you outline digital assets in your will, supported by a separate letter of wishes detailing instructions, and practical guidance, this will help in giving your executors authority to access your assets and digital inventory. It’s important to note that each company (i.e. Google, Instagram, Apple) has their own security policies in place. To prevent a breach of policy, be sure to check each platform’s security requirements prior to sharing information.

What Other Factors Should you Consider?

Accounting for Others

A common misconception is that estate planning is only necessary for more elderly individuals, when really it’s something that applies to a far wider audience. Any parents or carers for example, if you’ve kids under 18 or have someone else who depends on you, it’s wise to have a plan for who will care for them if you’re gone. It’s a difficult conversation and a big commitment, but having someone down as a legal guardian in your will can prevent a lot of unwarranted panic and distress.

Another precaution that can help offset stress and panic, is teaching your dependents the basic financial knowledge and routines they need to keep things in order. Say you’re the primary individual for looking after finances in your household, would your next of kin know what to do if you were to pass? If not, it could be worth making a financial fact-file including everything they need to know to keep the household running; covering basic things like bills, savings, subscriptions and rent.

Planning Ahead: Life Insurance and Inheritance Tax

Upon death, the government assesses the worth of your estate, failure to plan in advance can mean up to 40% of your estate is taxed. In reality, this only applies to 5% of the UK’s population as the majority don’t meet the threshold for taxation – everybody has an Inheritance Tax-free allowance of £325,000. It’s also important to note that anything left to your spouse or civil partner, will not be taxed at all, even if this were millions of pounds, this could not be taxed as it was left to someone you are legally bounded with.

For more elderly individuals, taking out life insurance is likely to very costly, however if you’re younger and have children who are reliant on you, it can be a serious weight lifted for a reasonable cost.

Level-term life insurance can be one of the most cost effective ways to protect your family’s income when you pass. Undoubtedly, this is an insurance policy which no one hopes to ever pay out, but it can be a reassuring safety net. Level-term life insurance means the pay out will always be the same amount and set for a specific term. Say you want the policy to be in place until your kids grow up, you could have the term scheduled at 18 years, and if something were to happen within this period they would receive the set amount.

Planning Ahead: Health Considerations

Of course the hope is that we can all live healthy, long lives, but this isn’t realistic and for many their health can begin to deteriorate well in advance of their passing. It’s wise to take the additional step of setting up a Lasting Power of Attorney (LPA), especially in cases where the individual might have early signs of illnesses like Parkinson’s disease or Alzheimer’s. An LPA allows a trusted nominee to look after their affairs, should they lose their ability.

On a similar subject, for those who have lost capacity but wish to be cared for or treated in a certain way once they are no longer able to make independent decisions, advance statements are a reliable solution.

Whether it be for personal or religious reasoning, you may want to make an advance statement to refuse certain medical treatments. Note, that you must be over the age of 18 and have mental capacity at the time of making. A similar stance applies to stating how you’d like to be cared for, you can make a note of things like dietary preferences, religious beliefs and where you’d like to be looked after. The forementioned aren’t legally binding, however those closest to you should consider them when looking after you.

The Personal Elements

No one wants to be planning their own funeral, but supplying your loved ones with a few notes and wishes on how you’d like your ceremony can provide a sense of comfort. Knowing that they’re honouring your requests can instil a great sense of relief and pride in those closest to you.

Depending on circumstances, you may also wish to leave behind personal notes and letters for friends and family. In some cases they may simply be letters reciting memories and gratitude, in other instances it might be to clarify details of your will. There is no set way to leave a message, and this will always be circumstantial.

A Final Word From Us

We hope this article can be of use to you, and that we’ve been able to provide some reassurance in what’s often a very daunting landscape. We understand the difficulty in addressing subjects as such, but having these conversations and taking action will help everyone involved in the longer term.

You’re giving yourself a sense of clarity, and you’re sparing your loved ones avoidable stresses, costs, and conflict. If you would like to discuss any of the points mentioned above, or have any other questions relating to estate planning, please do contact us. We are here to provide a service and to help.

 

Colmore Partners is an Appointed Representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority, the registration number is 223112.

This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice.

The Financial Conduct Authority does not regulate estate planning or tax planning.